HavanaJournal.com: Cuba Business

Hundreds of U.S. farm representatives expected in Cuba

Posted April 21, 2004 by publisher in Cuba Business.
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ANITA SNOW | Associated Press

HAVANA - Hundreds of U.S. farm representatives hoping to build long-term trade relationships with communist Cuba traveled here for a new round of talks opening Tuesday.

Cuban officials said they hoped to contact to buy as much as $100 million more in American farm products during the three-day event. More than 300 people from 150 U.S. companies were expected.

“This shows that American companies want to continue expanding business with Cuba,” said Pedro Alvarez, head of the Cuban food import company Alimport, which organized the talks.

Among American farm interests participating in the talks is the USA Rice Federation, which represents about 85 percent of rice producers in the United States.

“The importance of Cuba in terms of rice is huge for us - it’s huge for them,” said USA Rice Federation representative Marvin Leherer.

“Cuba was the No. 1 market for American rice prior to sanctions,” he said, referring to U.S. trade restrictions imposed more than four decades ago.

While American rice producers last year delivered about one-sixth of the estimated 600,000 tons that Cuba imports annually, “under normal commercial relations we would have the lion’s share of the market,” Leherer said.

Mexico is now the world’s No. 1 importer of American rice, buying about 750,000 metric tons annually, said Leherer.

He said that if U.S. trade sanctions against Cuba were dropped, “overnight it would become the No. 2 or 3 marker for American rice in the world.”

Also among those scheduled to participate in the talks were Cargill Inc., of Minnetonka, Minn.; Archer Daniels Midland of Decatur, Ill.; and Kaehler’s Homedale Farms in St. Charles, Minn.

In North Dakota, state Agriculture Commissioner Roger Johnson said Frank Moore, vice president of the Heartland Feed plant in Tioga, went to Havana to try to find a new market for alfalfa.

“We’ve been working with them to try to see if we can get these compressed bales into the Cuban market,” Johnson said.

Mike Bloyed, Heartland Feed’s president, called it an exploratory trip to ascertain the needs for alfalfa in Cuba.

Johnson also said Wayne Carrick of PS International is trying to secure another sale of chick peas. PS International is a North Carolina firm that has provided logistics for most of the previous ag sales involving North Dakota and Cuba, Johnson said.

Cuba signed a $750,000 contract for peas last December.

Johnson said he expects pea acreage to at least double in North Dakota this year from the 155,000 acres harvested in 2003. “That suggests to me that this year, following this harvest, we will probably be able to make a bigger dent in that Cuban market for peas,” he said.

North Dakota has also been trying to sell wheat to Cuba, Johnson said, but, “We just couldn’t quite get together price wise.”

Alimport organized a similar round of talks in December to mark the second anniversary of the first U.S. commercial food shipments to post-revolutionary Cuba

Since Cuba took advantage of an exception to the U.S. trade embargo allowing the direct, commercial sales of American farm products to the island, it has contracted to buy about $716 million in goods - including the price of transportation and banking fees, Alvarez said.

He said that the country has spent $640 million so far for those products.

Cuba first used the law in late 2001 to replenish its food reserves after Hurricane Michelle caused wide damage across the country.

The U.S. Cuba Trade and Economic Council, which tracks business between the two countries, estimates the value of American farm products purchased by Cuba thus far at closer to $430 million, excluding transportation, banking and other charges.

Because the law prohibits U.S. financing for the transactions, the Cuban funds generally are shipped through European banks, driving up the final costs.